Bitcoin Ponzi scheme operator pleads guilty to securities fraud

Trendon Shavers pleaded guilty today to operating a Ponzi scheme using the virtual currency bitcoin. The 33-year-old McKinney, Texas native started his own company, Bitcoin Savings & Trust, in 2011 and used it to collect bitcoins from prospective investors over the internet, claiming he would pay investors one percent interest on their investment every three days, or seven percent a week. Instead, Shavers used most of the bitcoins to pay back older investors a hallmark Ponzi scheme maneuver while spending the rest on a used BMW M5, a $1,000 Las Vegas steakhouse dinner, and a series of casino outings. Shavers pleaded guilty in Manhattan court to one charge of securities fraud in what is considered the first ever US criminal fraud case...